1/3rd of All Fake Online Pharmacies Get Domain Names From One Company

March 12, 2012

A new report by online pharmacy security company LegitScript claims that 33% of the world’s non-spam Internet fake pharmacies rely on one domain name registrar. Their new research report shows their willingness to “serve as a safe haven for criminal drug-related activity.”

LegitScript posed as an organized cybercrime network called “Pay-Rx.biz” preparing to create thousands of websites selling counterfeit drugs and controlled substances like Vicodin without a prescription. They approached Internet.bs, an ICANN-accredited Registrar, and asked them to register their domain names, even though “Pay-Rx.biz” said the US Food and Drug Administration and Interpol had previously shut down their sites for safety reasons.

Legitscript’s report said that Internet.bs was willing to engage in business with them, emphasizing that it would ignore any notifications from government authorities including the US Food and Drug Administration. Legitscript published their entire paper trail of evidence that led from business manager to the CEO, Marco Rinaudo, in which all contacted employees of Internet.bs were willing to do business with those who acknowledged they were breaking drug safety laws internationally.

Said Legitscript, “The company vehemently denied that it had (or would) cooperate with drug safety regulators in disabling counterfeit drug websites, even seeming offended and asking for an example. It indicated that ‘as long as (our) business is legal somewhere in the world’ and ‘not illegal in the Bahamas’ we would be safe with Internet.bs.”

“Rogue online drugs sellers need technical support services. For years, those providing these services have concealed their role in the illegal drug trade. LegitScript’s innovative work exposes these shady operations for what they are: willing partners anxious to provide essential services to any and all internet drug pushers,” said Tom Kubic, President and CEO of the Pharmaceutical Security Institute.

After “Pay-Rx.biz” pretended to sell drugs without prescription requirements that are controlled substances by virtue of international treaties, including Oxycontin and Xanax, which is nearly universally illegal, and admitted as such to Internet.bs, the company was willing to do business with them, even offering advice on how to avoid scrutiny by regulators by using other nameservers. This policy was confirmed not only by the business manager but by the CEO of the company in emails.

Says Legitscript, “Screenshots of undercover emails in the report show that Internet.bs welcomed the business, saying that it is ‘one of the safest (Registrars) for pharma domains.’ The undercover researchers were ultimately able to register hundreds of websites with names like like oxycodonenoprescription.com and genuine-anti-cancer-drugs.com, and post fake online pharmacy content.”

Internet.bs, professing to be located in the Bahamas, said that they were only subject to Bahamian rules and did not heed requests from foreign governments to shut down domains, and that unlicensed online pharmacies are not illegal in the Bahamas. However, it is against the law in the Bahamas to operate an internet pharmacy in any form. And it is a violation of ICANN policy to defy international law.

Email from the CEO, Marco Rinaudo, acknowledged this in Legitscript’s investigation, “We are the Registrar of dozen of thousand [sic] of legal online pharmacies and our policy is not to accept court order or cease and desist requests from outside our Jurisdiction which is the Commonwealth of the Bahamas. We understand that you are legally entitled to sell products without prescription without breaching your local laws.”

Says Legitscript, “Rogue domain name registrars like Internet.bs that intentionally flout international law are acting in a manner that undermines that agreement for ICANN-accredited Domain Name Registrars. Registrars must remain accredited by an organization called the Internet Corporation for Assigned Names and Numbers (ICANN). As part of that accreditation, the Registrar has to abide by certain rules.”

“Domain name registrars such as internet.bs must contractually prohibit their customers’ use of domain names for unlawful purposes and must also adhere to laws, and cannot turn a blind eye or knowingly facilitate the unlawful use of domain names,” admonishes Legitscript.

Tellingly, the top largest domain name registrars, GoDaddy and eNom, while having 35% and 8.5% of the world’s domain names, respectively, actively suspend domain names engaged in cybercrime, including fake online pharmacies, and on average have less than 1% of the fake internet pharmacy market, reports Legitscript.

After hearing word of Legitscript’s report, Internet.bs took down Legitscript’s fake pharmacy domain names, and put up a self-promoting accolade “Breaking news – 176 illegal pharmaceutical domains Suspended” on their own website, although 175 domains belonged to Legitscript.

“With growing use of the Internet and online platforms, these findings make it imperative to address the illicit marketing of drugs by these suspect sellers. As a patient safety concern, these facilitators of counterfeits and substandard drugs being sold without prescriptions represent a global health issue. We must take advantage of these findings to stop these criminals from preying upon those who place their hopes in the authenticity of the drugs they take,” said Professor Bryan Liang, MD, PhD, JD, Executive Director of the Institute of Health Law Studies, California Western School of Law, and Director, San Diego Center for Patient Safety at the University of California, San Diego School of Medicine, and Vice President for the Partnership for Safe Medicines.